HOW TO IMPORT CARS FROM JAPAN AND THE TRAPS TO AVOID

This is a transcript of the podcast interview conducted with Chris from Prime Car Imports. Watch the video here.

Welcome to Performance Car Lounge, where each week we speak with enthusiasts selling their beloved performance cars. This week we discuss how to import your dream car. If you are interested in importing a car from overseas, then today's podcast is for you. We're going to run through which cars you can import, the pitfalls that you can run into, and run through the whole process from beginning to end, to ensure that you understand what's involved and the dangers involved with importing your dream car from overseas. And today I'm joined by Chris from Prime Car Imports. So Chris has actually recently helped me import an R35 GTR. You may remember Chris from the R35 GTR podcast, which is the most expensive podcast I have ever done because it resulted in me spending a lot of money on a new car, but I don't regret it one bit. And welcome to the podcast, Chris. Good morning. Well, thanks. So, Chris, do you think that importing of cars from overseas is becoming more popular? Absolutely. There's lots of guys reaching the age where they feel like they can afford a sports car or whatnot. And, Japan's got all of those amazing cars that we all sort of grew up with. And I'm finding more and more that the requests are coming from middle aged guys who can afford the better car, like a GT-R or whatnot. And yeah, it's it's pretty much a case of demand is starting to exceed supply and the prices are actually going up.

That's interesting. So a couple of points here is. First of all, people are choosing to spend their money on older cars from overseas rather than cars that are available new today. I wonder if that's, speaks to the type of cars that are available today and they're just not appealing to to the buyers, or if it's more a nostalgia sort of a buy for some of these people. That's a really, common question that I like to ask people, you know, why are you drawn to this particular model? Because some of them are very hard to to get. And it's kind of like a mid-life crisis. I believe it's something that they grew up with that they always wanted to at the time they put other financial commitments ahead of buying the cars, but now they're like, well, I've got a few dollars saved up. I can afford it now. I'm going to buy one. That's what's happening. And you've described me to a tee there. Great. well into my midlife crisis. So you also mentioned that, Japan is the place that most cars are coming out of. Why is that? And what other countries can you import cars from? You know, Japan's got the biggest sort of, range of cars in the more sort of affordable sports car section. And a lot of us grew up watching, you know, Fast and Furious Tokyo Drift and saw S15 and XS and all these different sorts of cars. The GR supra is yeah, that's what we sort of grew up with versus the previous generation was, you know, m fives and some of the big American cars and Ferrari because they didn't have the option. But having said that, Hong Kong has a lot of Ferraris and Porsches and things coming on the market at pretty good prices. So, you know, we've had some recent inquiries about getting Ferraris from Hong Kong, then the UK, some of the rolling 25 year old cars, like just got a request for a Peugeot 205 GTI, you know, a pretty rare car, but it's got some racing heritage. Then Audi rates and some of the older BMW m5 because. They're not easy to find in Australia. They're just not. But over there, you know, if you want one, you've got ten to choose from instantly. So I think that's why people are starting to look abroad to buy these things. And also prices are a little bit less than Australia. So quite often you know you're not going to lose money. you might make a few dollars by buying one. So I think that's part of the driving force as well. Yeah. And you've mentioned a whole range of cars there. What are you seeing as the most popular cars coming through at the moment that people are choosing to import?

Well, that's a good question because just this week, I've had requests for a Lexus ISF, Nissan GT-R, Toyota chaser, Toyota Vellfire family van. You know, it's a real sort of broad spectrum happening. The, the family van is actually a really good thing to talk about. They didn't sell these luxury spec hybrid vans in Australia. Brand new. And Japan's got all these different offerings and. You know, the people movers. They like seven seats, leather. All the seats turn around, they recline, they're heated and cooled. There's all these luxuries which we're not used to in Australia, and they're a really good option for growing families. So, you know, we're seeing a few of those requests come through at least asking for pricing and, and what it all means and what the options are. All right. And what are the rules like. Can I just import any car that's for sale overseas and bring it into Australia, or are there some restrictions around that? Okay, there's lots of restrictions which lead to lots of traps for for first timers and whatnot. The easiest one rolling 25 year old rule. If you can find a car which is over 25 years old, it's generally acceptable. And same with left hand drive cars. So might see some older Porsches and things coming through, and American cars and left hand drive. But when a car is under 25 years, it has to be on a list called a service list. It's a specialist enthusiast vehicles list, where the government has looked at proposals that people have put forward to import specific models of car that weren't sold here, and if it cuts it in terms of safety and things, just with modern modifications, they'll let it through. If a car is under 25 years old and it's not on that list, it's exceedingly hard to get through unless you're prepared to put up the money and hope that the government accepts it. So the I don't do that. I specialise in things which are already on that list, and there's a lot of cars there, but make sure the car is on the list before you buy it. What's the potential downside if you buy a car? That's that's on the list. And from my understanding, you could potentially buy a car that is on the list but doesn't meet the, for example, the manufacturers of manufacture criteria. So that's a really good one with Nissan GT-R because there's a lot of GT-R available in Japan, but they were sold here, brand new in Australia from February and 2009. So to import a car from Japan, you need to buy a build date where it was not sold new here, which means up to January 2009 from when they first came out in 2007. So you really only got 1314 months of build dates there to actually, buy from. If you buy anything else, it won't be accepted and complied in the country. And that's a trap. People just buy anything and hope for the best. But inevitably the car gets sent back to, where it came from. So that's a really valid point for anybody thinking about importing a car. You know, the car might be on the list, but if it doesn't meet the detailed criteria and you get it to Australia, what are the ramifications? Well, what happens then? Well, this is the problem that can be all sorts of fines and different things. But ultimately, the car can be sent back. But what we see is there's some people who buy cars from the Japanese version of car sales thinking, oh, yes, because they've got a price there and a price to get it on a ship and whatnot. But when they get it here, they haven't read the fine print, and the people in Japan don't know, they just offering a service and it can't be complied. It won't get the vehicle import approval. No matter what you do, it can't be driven on the roads in Australia. So then they've they're in a pickle. They've bought this car, you know, X amount of dollars and have to send it back to be resold in Japan to try to recoup their money. As you can imagine, there's a lot of costs involved with that. And people lose money. They get caught out. Oh, I could see you losing a lot of money. So I think the takeaway from that is unless you're really confident in what you're doing, you need to speak with the specialist first before you commit to buying a car. Yeah. Mentioned buying a car off the Japanese version of car sales. Is that where you're sourcing the majority of cars that you bring into Australia for clients? I see the Japanese are onto it that America and Australia buy the cars from auction. So that's the biggest exposure. So what happens is when the Japanese go to sell their car, they send it to the auctions because they know that Australian and American enthusiasts and other people will be competing to buy that car. This is going to the local dealer. You know, chances are it's just going to be a local that buys it. So you'll find that the rubbish cars go to the to the locals because they won't get the premium price. And the good ones actually go to the auctions. So, yeah, I definitely prefer to, to buy them from auctions. Can I just bid at an auction myself and buy a car? If I see a car that I'm interested in, that's that's going to auction. How do I get access to that car? How do I bid on that car?

Okay, so that's a bit of a challenge. If you want to bid in a Japanese auction, you actually need to be registered with the company that's having the auction over in Japan. they actually do physical checks to make sure that you've got a physical office in Japan so that you can actually, be part of their system. So I engage, some different subcontractors who actually bid and inspect cars on our behalf. So you need to make sure that you've got these, experts over there inspecting the cars properly. Like, suppose a GT-R is a very good example. You can't just have anyone, Inspector GT-R, you've got to have someone who knows what to look for, where they go wrong, what noises are bad. So, you know, based on that, you can set a budget. And then the people who do those inspections are working with other people who do all the bidding. so they will bid on your behalf. You provide a budget and they will go up to your max budget, hopefully less, and try to win the car for you from auction. And then they'll take care of exporting the car as well, making sure it gets to the port and is looked after. So as a layperson trying to find somebody to inspect the car for me, I'd imagine that that would be very difficult because I wouldn't know where to start, who to engage. So probably speaking with somebody like you who can help coordinate the whole process and use people that you trust and that, you know, have done it before, and a specialist in inspecting that type of car is probably crucial. That's it. I've used different inspectors for different sorts of cars. You know, I've got one inspector who loves Toyota. Anything else in his mind is rubbish. But you know, he knows everything about a Lexus or a Toyota. He's an excellent asset. Inspects all of that versus GLS. Use somebody else. But I can tell you, it took a little while to to work this out to make sure, you know, there's certainly companies out there, big ones, which I won't use for inspecting anything just because you become a bit of a number and they don't apply the attention to detail that you really require. and we're not talking small investments here. People spend significant amounts of money and they want a good outcome.

That that was the case with my, 35 GTR. I remember having the car inspected and speaking with you. There was a lot of back and forth. We we looked at a lot of cars and we knocked a lot of cars on the head. We didn't proceed with bidding on quite a few cars because they simply didn't meet, you know, your standards of quality and the criteria that I was looking for in a car, I'm sure that you can shop to anybody's budget or to anybody's standard. But, you know, I was looking for a very clean car, an original car and a quality car, and it was very helpful to have your contacts and you helping facilitate the whole process on my behalf. And it's satisfying when you get it right, you know, like it's fun when you find it. But having said that, I've just started looking for an Evo six for someone. Now, Evo six is rust. they've got these subframes that rust out. They rust out near the petrol filler cups. There's just they're just inherently rusty cars. But this person I'm finding it for, he wants a project. He wants one which is good enough that it's not falling apart. But he doesn't mind if he has to invest some money restoring and making it how he wants it. he actually wants the project. Yeah. So, you know, each to their own. I just want to drive them. Yeah, yeah. And I guess one of the overriding classifications is the auction sheet that they use in Japan that has a grading on it. Can you talk us through the gradings? The car that I ended up purchasing had a grading of 4.5 B. So can you explain to the the listeners of how this grading system works? All right. So generally the option sheets okay. For the the numeric number, it's based on a scale of 1 to 6 typically only see 2 to 5 five being the best pretty much as new and one being you know target to the beyond. I can't believe it's going through an auction. Typically, anything worth having starts at grade 3.5 and goes up, but a 4.5 car is a is generally an excellent car. Not too many stone chips, very straight, no replacement panels, not sun faded. You know, it's referring generally to the external appearance of the car. No missing bits of trim or anything like that. A 4.5 car is very good. Quite often the sweet spot is a grade four where there might be a few chips and things, you know, but it's not too bad. But 3.5, you start to go, okay, to make this really nice, I've got to spend a few dollars on it. But it's not the end of the world. But like my personal car is a grade 4.5, I wanted something very good. And, you know, I paid for it. And that's what I got with the interior A, B, C, or D. So basically. Anything that's been driven more than 500km. Like the best writing it's going to get, it's a great B. after that, C and D to use gears for an example, a lot of them are graded C because they've got a frequent, crack issue. And if you get a grade B car, it's likely the dash has no cracks whatsoever. And you know, that's rare, but they do come up. So having said all of that, you use those auction sheets as a general guide. Certainly there's been cases where I've seen, you know, what's meant to be a grade four and a half B car. And you look at it and go, oh, who possibly dreamt up those, results? You know, it's just not good enough. And we don't go any further after the inspection. A personal inspection from an expert inspector is essential. Don't go buying a car without that. Yeah, right. So you don't you don't believe the auction sheet, because that sounds like it's open to a bit of interpretation from whoever inspected the car. So you need someone you trust ultimately to to look at the car before you commit to. That's right. Yeah. Purchasing. All right. So from what I've gathered here and this is what I did, is you need someone who knows all the right people? Who knows the ins and outs like yourself. To help you navigate the process. So can you talk us through the process? If I came to you today and said, I'm looking for a Honda NSX, what would be the next? What would be the next steps?

Okay, well, we'd have a big long chat about expectations. You know, the sort of five popular colors in Honda NSX, auto and manual. There's lots of autos out there, and they sell for significantly less money than manual. So we look at that, we talk about budget. And then I'd be able to provide some examples, like examples of, recent auction results. So you could know what to expect if you go ahead and we start looking for one. And based on those conversations, if, all the expectations and the dollars line up and, you know, I can answer all of your questions, we'd start proceeding and look for a car in the event that we find one that we like and we have it inspected and it checks out, we'd talk about it and set a budget for that particular car, for the auction bidding. In the event that we're successful and we win the car, there's all sorts of things that need to happen. I have my clients pay the, Auction houses directly in Japan, and I'll make sure that everything's organized as far as getting the car to the port or storage where it needs to go. While, you know, we get all the approvals done in Australia to make sure it's not going to be one of these cars that gets sent back. And, you know, from there it jumps on a ship. I get it sent to a compliance shop that is most convenient to you. I'm networked with shops all around the country, so that's very handy.

I can send a car to Perth or Melbourne, Brisbane wherever, and I've got someone there trusted workshop that will help out to get it complied. And then you get the car. You touched on a point there that was a not a big leap of faith, but it was good to have you there guiding me. So when we did win the option auction, it was a very exciting day. But then it came time to pay the auction house, and you have to pay them in the local currency.

So one thing to keep in mind, I guess, is to to look at the exchange rates that are occurring at the time as well, because that does have an impact on the final cost of the car to you. but it was also good having your guidance and just reassurance, saying, you know, this is the people you pay, this is how you do it. You actually helped me through the steps of transferring that money to another country. so it was it didn't feel risky. And it wasn't I didn't feel like I just transferred this big chunk of money, and I was never going to see it again.

I was confident the whole way that that, you know, things were moving and and that, you know, the car was, was coming. I remember that feeling the first time I imported a car 15 years ago, I, I probably was spending a bit too much money, more than I could afford, but I did it anyway. And just the anticipation waiting for this car to turn up, hoping that it was going to be okay, and hoping they got the car. You know, it was a leap of faith at the time. Yeah, I agree, but as far as actually transferring the money, there's several different services available. Some banks have a reasonable rate, but I find that I use, x.com for my, personal, Purchases. I find that's a pretty good rate, and they're pretty efficient. and I've used others in the past with similar sort of result. It's a personal preference, really, and you might have existing relationships which work out well, you know, for the exchange rate as well. Exchange rates though.

Yeah, it's a big one. It's a big one at the moment globally there's a lot of turmoil. And when Trump says something it might suddenly change, foreign policy around the world, which, you know, affects exchange rates. It's, it's a crazy time at the moment. The exchange rate is still very strong. You know, it's around, ¥100 per dollar (October 2024), which is pretty good. but, you know, we can see, dramatic rise and fall very quickly at the moment in a matter of a couple of days when I do my calculations, I like to use an exchange rate based on if the rate slipped a few percent. So there's no sort of rude surprises.

But, you know, every now and then you might go further. So you've got to be quick and be prepared to act. You know, the purchase price of the car is really just the beginning. So that price includes obviously you're paying for the car and that gets it to the port. Is that correct as well that. Yeah. So that will get it to the port and booked on a ship

. After that you've got the shipping costs and all the government taxes and quarantines and things like this in Japan. They've got these, stinkbugs which we need to, treat with heat to make sure that they don't come to Australia. I think, biosecurity is a pretty important thing. So, it's good that that's in place. So generally a shipping company that that next invoice will include the shipping GST, any other import duties and cleaning and whatnot. And after that it's the yeah, the compliance bill. So quite often you see a term FOB bandied about in the price of the cars. So what does that stand for. And okay FOB free on board. Nothing's free. Yeah, but basically, it means we include getting your car from the, auction house to the storage facility to get it onto the ship, and we make sure it's there, ready to go. So another really good thing that you did for me to ensure that there was no rude shocks with the price of the car. And I knew from the beginning how much it was going to cost me, basically complied and and registered. Because when you buy the car that that is really just the beginning of the cost. So you get it on the boat and you've got to pay for the shipping. So like you mentioned, and then there's the GST that has to go on that. And depending on the price of the car, my my GT-R was subject to luxury car tax. So that went on top of as well. Plus like you said the heat treatment and we did some extra insurance as well to make sure that if it was damaged along the way we were covered. and the compliance thing. So you have a calculator that you use that, that basically from day one, I knew what it was going to cost me, registered on the road. I don't expect people to come to me and say, hey, I've got x million yen to spend on a, on a car. How much is that going to cost me when I get to Australia? When I talk with people or talk about how much?

The landed complied ready for registration. Figure is in Australia because that's that's the cost of the car. Stamp duty rules and registrations vary from state to state. So I generally let people look after that component themselves. But when I'm working with people, it's the land of complied figure. So there's no extra costs beyond that. To be clear, it is markedly different from the purchase price of the car, the purchase price of the car, you know, depending on on which car it is, is only part of your total cost. So if you've got a budget, don't use your whole budget like on buying the car because there are other costs to follow. So that's right and aware of that. So you have to remember that you're buying a car from a different country. And especially enthusiast cars, if they've got very low case, they might have some old tyres and old oil and things like that. They might need to, to budget for these days. So there's things like that that you might want to do straightaway when they get the car as well. And yeah, we talk about those you mentioned before, customs and compliance, what happens there. And for example, what happens if I bring in a car that's got some, you know, great coil over suspension on it or some aftermarket wheels, is that potentially a problem or is that all? Okay, okay. So a lot of people might see a lot of examples floating around the internet of modified cars coming into the country, which just look wild. World wide body kits, all sorts of crazy things. But recently there's been a bit of an industry checkup. And, the government wants to ensure that the cars that are coming in to do meet this sort of stringent safety standards, and they're requiring standard suspension and standard wheels on cars at the moment. So a lot of cars like, say one of the performance bargains, Lexus Is350. The cars can be had for $14,000 or something like that, but they, inevitably come with aftermarket wheels, you know, which is you think is a really good thing. But that will stop you in your tracks when it comes to compliance. So I'm actively searching for the more standard cars. And in some cases, like I've got a set of Lexus Is350, wheels which can be substituted for my clients for compliance. Yeah, because the moment the car is complied, it is completely legal to put on a legal set of wheels in Australia like any other car in Australia. That's right. So, you know, we're not breaking any rules. It was complied with the perfect wheels. So that's what we're doing at the moment to make sure we, you know, we do a good job, get it right. What other works typically did the compliance company do to the cars okay. So different cars have different criteria. Some cars might not come through with say seatbelts which are designed to take the, block to the same parameters as an Australian car might be. So you might have to, because we're a lot bigger than Japanese people, we might be quite a bit heavier. Yeah, well, you know, they're often quite small, aren't they? you know, healthier, maybe. But, you know, there's different costs depending on different cars. But generally compliance is somewhere between 2000 and 2500 dollars to have completed in Australia. That's there's a lot of steps to the process there, including the freight on a ship from overseas. From the day that you're successful at auction in winning a car. How long typically does it take until you can actually pick up your car and and drive it on the street in Australia? 12 to 14 weeks. I've got a record of nine weeks, and I'd like to try to make that the norm. But suppose you buy a I've got a few sort of strict rules about how I operate to make sure there's no sort of boomerang cars, the ones which come over here and then get set back and waste people's time and money. So there's a few things that I like to do before the car leaves Japan. So typically it might take four weeks before it gets on the boat. The boat rides, depending on where you are in Australia, is anywhere between 10 and 14 days. At the moment, the ports are pretty efficient. It only takes a couple of days for quarantine and for, vehicles to be released at the ports and then compliance shops. I've got a little bit of a backlog just at the moment with rules being applied so thoroughly. So it takes about three weeks there for compliance. So while I'm always pushing for the most efficient pathway to get the cars into Australia, I won't skip steps just which which might compromise the outcome. so typically 12 to 14 weeks is a safe zone. But I'm actually I'm working with people to try to bring that down. And ultimately these cars need to be inspected by an independent inspector that's registered with the government. That's right. Yeah. Yeah. So it's not only a compliance shop carrying out work to meet what's called a model report. It's also these engineers which come along and check on everything to make sure it's exactly as these shops say. And I guess you've had so much experience in this realm. We'd love to hear about any horror stories you've you've experienced or witnessed or, or know of. You know, the biggest horror stories I've heard of, boomerang cars, the ones where people buy them and they're not on that list or whatever. They cannot be complied. That's a big one. But then also, oh, there's some shocking stories about people buying them from the Japanese versions of car sales where they're relying on pictures only, no videos of the cars running, and they the cars arrive and they've sort of blown head gaskets or whatever, just really bad results. I cannot emphasize enough the value of an expert inspection. You know, people try to skip that step just to save a few hundred dollars. It's not a good idea. From my experience and from my conversations with you, this this isn't a straightforward process. There's lots of pitfalls for people and, you know, mistakes that can be made. So I would recommend that anybody who's thinking about importing a car from Japan or anywhere else in the world, talk to an expert like Chris. I found dealing with Chris to be not just very helpful and useful, but I've enjoyed it thoroughly because, Chris, you're you're a true car enthusiast as well. And and you get just as excited about bringing in these cars as the customers. I think, you know, it's great when it all comes together, you know, like some of these, cars, you know, we dream about them for 20 years before we buy them. And, you know, when the car is finally handed over to the owner. It's just such a good feeling, you know, because it is a bit of a long road like that 12 to 14 weeks. And, you know, often there was, you know, decades leading up to that moment where people wanted to buy them. So it's just it's a feel good industry. Yeah. Yeah. That 12 to 14 weeks feels like six months from experience. Yeah. You're just so excited to see that car. So if someone is interested in finding out more and they want to just learn about the process, how do they get in contact with you? Best bet just reach out through my, Prime Car Imports web page. Or, you know, we're on the social media as well, you know, and happy to answer any questions because there's a lot of them. There's a lot of questions. You know, you might not be ready to sort of pull the trigger and invest your money in one right now. But it's good to know what's involved in the process. You know what to expect. how the market changes, what rule changes are coming up. And yeah, more than happy to have a chat and then work it out. Well, I really appreciate you sharing your knowledge on the podcast today. Chris, thank you so much for taking the time to join us. No worries, we'll speak soon. Thanks for joining us at Performance Car Lounge. If you have a performance car with an interesting story that you were selling, contact us at PerformanceCarlounge.com.au